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<TABLE cellSpacing=0 cellPadding=1 width="100%" border=0><TBODY><TR><TD><SPAN class=TopStory>Black holes in the global Reich</SPAN>
<SPAN class=Subheadline>Common Sense</SPAN></TD></TR><TR><TD>John Maxwell
Sunday, March 18, 2007
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<P class=StoryText align=justify>In my one excursion out of the ranks of the working press, half a century ago, I was the first information officer for the Industrial Development Corporation, preaching the benefits of industrialisation by invitation.<TABLE cellSpacing=0 cellPadding=5 width=157 align=left border=0><TBODY><TR><TD>
</TD></TR><TR><TD><SPAN class=Description>John Maxwell </SPAN></TD></TR></TBODY></TABLE><P class=StoryText align=justify>At that time, Norman Manley was premier and the government was a great admirer of the Puerto Rican model of development. The western world was also convinced that underdeveloped countries would find in this model a sovereign remedy for underdevelopment. If we could attract capital, we would create jobs and find our way onto the runway for 'take-off' into the realm of first world development.<P class=StoryText align=justify>Fifty years later we are no further forward than we were then and in some ways, we are behind where we were.
Oddly enough, the same is true of our model, Puerto Rico.
Puerto Rico seemed to have all the advantages. Their people were citizens of the US and at that time, nearly half of all Puerto Ricans lived in the US. Today there are more Puerto Ricans in the US than in Puerto Rico.<P class=StoryText align=justify>A few months ago, the New York Times (NYT) published an editorial Puerto Rico, an Island in Distress in which that other blessed isle was described in terms normally reserved for places like Jamaica. In January, the Miami Herald published a news story entitled Puerto Rican killings may bring out National Guard in which it was revealed that in the first 15 days of this year there were 46 homicides in Puerto Rico, just about the same level as in Jamaica.<P class=StoryText align=justify>The NYT editorial was a commentary on "The most exhaustive study of the Puerto Rican economy done in the past 75 years". This study, done jointly by the Brookings Institution and a Puerto Rican think tank, said that Puerto Rico's "hoped-for renaissance will require that the private sector and government join together to create thousands of jobs and that tax and other policies have to be developed to make this happen".<P class=StoryText align=justify>The situation is indeed dire. According to the study, "About 48 per cent of Puerto Rico's 3.8 million people live below the federal poverty line, based on the 2000 census. Despite the advances the island has made through the years, it has a per capita income of $8,185 - about half that of Mississippi, unemployment hovers at 13 per cent."<P class=StoryText align=justify>This is odd, since Puerto Rico, with 50 per cent more people than Jamaica, gets in one year, assistance from the United States equivalent to Jamaica's entire national public debt. "The island receives about $11 billion from Washington, $6 billion of which is through social security and federal worker pensions and salaries."<P class=StoryText align=justify>That is, PR receives nearly one billion dollars in aid every month.
In the 1950s and 1960s, Puerto Rico became a showcase for private sector investment and development. US government assistance enabled Puerto Rico to offer huge subsidies to manufacturers wishing to relocate to the island, but it soon became apparent that it was costing the US taxpayer about US$70,000 to bring an American job to PR, nearly twice as much as the real cost.<P class=StoryText align=justify>In addition to this, as in Jamaica, screwdriver industries began to leave the country as soon as there appeared to be cheaper labour elsewhere. The same process has
<SPAN class=Subheadline>Common Sense</SPAN></TD></TR><TR><TD>John Maxwell
Sunday, March 18, 2007
</TD></TR></TBODY></TABLE>
<P class=StoryText align=justify>In my one excursion out of the ranks of the working press, half a century ago, I was the first information officer for the Industrial Development Corporation, preaching the benefits of industrialisation by invitation.<TABLE cellSpacing=0 cellPadding=5 width=157 align=left border=0><TBODY><TR><TD>
</TD></TR><TR><TD><SPAN class=Description>John Maxwell </SPAN></TD></TR></TBODY></TABLE><P class=StoryText align=justify>At that time, Norman Manley was premier and the government was a great admirer of the Puerto Rican model of development. The western world was also convinced that underdeveloped countries would find in this model a sovereign remedy for underdevelopment. If we could attract capital, we would create jobs and find our way onto the runway for 'take-off' into the realm of first world development.<P class=StoryText align=justify>Fifty years later we are no further forward than we were then and in some ways, we are behind where we were.Oddly enough, the same is true of our model, Puerto Rico.
Puerto Rico seemed to have all the advantages. Their people were citizens of the US and at that time, nearly half of all Puerto Ricans lived in the US. Today there are more Puerto Ricans in the US than in Puerto Rico.<P class=StoryText align=justify>A few months ago, the New York Times (NYT) published an editorial Puerto Rico, an Island in Distress in which that other blessed isle was described in terms normally reserved for places like Jamaica. In January, the Miami Herald published a news story entitled Puerto Rican killings may bring out National Guard in which it was revealed that in the first 15 days of this year there were 46 homicides in Puerto Rico, just about the same level as in Jamaica.<P class=StoryText align=justify>The NYT editorial was a commentary on "The most exhaustive study of the Puerto Rican economy done in the past 75 years". This study, done jointly by the Brookings Institution and a Puerto Rican think tank, said that Puerto Rico's "hoped-for renaissance will require that the private sector and government join together to create thousands of jobs and that tax and other policies have to be developed to make this happen".<P class=StoryText align=justify>The situation is indeed dire. According to the study, "About 48 per cent of Puerto Rico's 3.8 million people live below the federal poverty line, based on the 2000 census. Despite the advances the island has made through the years, it has a per capita income of $8,185 - about half that of Mississippi, unemployment hovers at 13 per cent."<P class=StoryText align=justify>This is odd, since Puerto Rico, with 50 per cent more people than Jamaica, gets in one year, assistance from the United States equivalent to Jamaica's entire national public debt. "The island receives about $11 billion from Washington, $6 billion of which is through social security and federal worker pensions and salaries."<P class=StoryText align=justify>That is, PR receives nearly one billion dollars in aid every month.
In the 1950s and 1960s, Puerto Rico became a showcase for private sector investment and development. US government assistance enabled Puerto Rico to offer huge subsidies to manufacturers wishing to relocate to the island, but it soon became apparent that it was costing the US taxpayer about US$70,000 to bring an American job to PR, nearly twice as much as the real cost.<P class=StoryText align=justify>In addition to this, as in Jamaica, screwdriver industries began to leave the country as soon as there appeared to be cheaper labour elsewhere. The same process has